In Costs-Plus-Fixed-Fee Contracts the Allocation of a Specific Cost May

question 106

True/False

In costs-plus-fixed-fee contracts the allocation of a specific cost may be difficult to defend on the basis of any cause-and-effect reasoning.

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Definitions:

Average Operating Assets

The average value of the assets used in the normal operating activities of a business over a specific period.

Return On Investment

A measure of the profitability of an investment, calculated as a percentage of the return divided by the cost of the investment.

Return On Investment

A metric to assess the effectiveness or profit generated by an investment in comparison to its expense.

Net Operating Income

Net operating income is the total profit of a company derived from its regular, core business operations, excluding deductions for interest and taxes.